Latest news with #AmitabhChaudhry
Time of India
3 days ago
- Business
- Time of India
RBI rate cut to support growth; when credit offtake rises, so will deposits: Axis Bank CEO Amitabh Chaudhry
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel Geopolitical tensions will not impact India 's growth story, and with a rate cut, credit demand will increase, said Amitabh Chaudhry , managing director and CEO of Axis Bank . In an interview with Saloni Shukla and Sangita Mehta, he said the entry of well-capitalised Japanese banks should not be a concern, and that while some individuals of the new generation would want to be on the investment side, new entrepreneurs will emerge. Edited excerpts:Global economic growth is the weakest since the big recession. It is being driven by the tariff war and geopolitical tensions, which is resulting in uncertain policies. The investment climate has been aggravated and consumer confidence is at a lower level because people, when they see volatility they tend to postpone purchases. India is much less impacted by some of these global factors, and I think our key relationships across the world are working in our quite a few families, the new generation wants to be on the investment side and have professionals manage the business. If you are on the investment side, you become a bit cautious on the business side. But new entrepreneurs will come in and replace them over a period. So, I am not worried that in some business groups, the newer generation is not necessarily involved in the business. If they stop growing, someone will come and replace them. I don't think that we lack entrepreneurs and lack the hunger every sector, several new players have come over a period and created businesses out of nothing, and they are very large businesses. Indian entrepreneurship is a very strong capital is long-term, signalling strong confidence in India's growth. From a competition perspective, they'e investing in small institutions — how these evolve remains to be seen. India is not an easy country to run a business in. I am not saying from a negative perspective. But to be able to grow extremely rapidly — much faster than what all of us are doing — is not going to be an easy thing to do. RBI lowered interest rates rapidly, signalling that it supports growth. In the next couple of quarters, it should feed through on the GDP growth side. As credit picks up, hopefully the growth projections will be upped a little bit this year. When credit growth comes back, deposit growth will also come 70% of our loans are floating rate loans, which are linked to repo. There will be a negative impact on NIMs to start with, but interest rates (will) come off on the deposit side. Over a 12-month cycle, the margin should come back up. ( Axis Bank NIM for FY25 is at 3.98%).Banks are chasing deposits, as credit growth depends on deposit growth. With government funds parked at RBI and more money flowing into mutual funds, while it remains as a deposit in the system, it is coming to the banking system at a higher cost. Asset growth must follow deposit private capex is finally picking up, with projected investments of Rs 1.25-1.35 lakh crore —70% in infrastructure. But the environment remains uncertain and volatile. While some large groups are investing heavily in infra, most are cautious, opting for incremental investments. The problem is volatility, the bankruptcy Bill, the fact that I could lose my business, the fact that in this environment should I put large bucks (in business) as I did in the past is what they need to be cognizant and deposit growth rates have now converged, as sustained divergence wasn't feasible. Deposit growth is expected at 11-13% in FY26. Wholesale credit demand is driven by five or six large business groups; smaller players aren't investing at scale. Retail growth may return as the cycle stabilises and consumption picks up, with some banks signalling a Bank is a bit cautious, as risk-taking demands clarity, real growth numbers which will impress you, I would say it is still a couple of quarters 3-4 years, our growth matched ICICI's; only in the last 2-4 quarters have they outpaced us. Our higher loan-to-deposit ratio (LDR), shaped by LCR norms and RBI's worry that banks are growing fast, limited our pace. To reduce LDR, we had to sharply cut incremental lending. ICICI benefited from a stronger salary account base in a depositconstrained market. We've strengthened acquisitions, deepened relationships and integrated Citi to boost our deposit franchise.: As per its growth plans, Axis Finance is looking to raise Rs 3,000 crore. We are in no position to infuse further capital because that is the commitment we have made to RBI. We have no option but to go to the market and try to raise the capital. We are running a process right now for that. With their rapid growth, they'll soon hit the upper-layer (NBFC) limits, so we'll follow all rules and decide on listing or stake sales when the time we'll consider the right opportunity. Typically, companies we like are overpriced, while affordable ones have issues. For MFI businesses, caution is key — they're entrepreneur-built and ambition is not reduced; it has not gone away. We have created a platform which can win. We are saying we can't just become number two overnight. But there are businesses we have in mind where we want to continue to improve our position as number one or number two. And as that share increases, automatically the gap between us and the second player will reduce. It's a long way to been some misunderstanding around the audit changes. Our former chief audit officer was a well-regarded banker, not a lifelong auditor. He got an opportunity internally within the bank. His replacement, an audit expert, joined but soon felt overwhelmed due to personal issues. He quickly admitted the mismatch, and we acted fast he exited within 10 days to avoid speculation. As for Rajiv Anand (deputy managing director), he had planned to retire. Some external opportunities may now be in play, but he has agreed to stay on as chairman of Axis Max Life , signalling continued association with the group
Time of India
6 days ago
- Business
- Time of India
Axis Bank won't infuse more capital into NBFC; it will tap market
Mumbai: Axis Bank has committed to the Reserve Bank of India ( RBI ) that the lender will not infuse any new capital into its wholly-owned finance company Axis Finance , Amitabh Chaudhry , CEO of the private bank, told ET. The NBFC is working on plans to raise ₹3,000 crore through an initial public offering (IPO), he said. The commitment to the RBI comes in the backdrop of the central bank's draft guidelines issued last October on 'Forms of Business and Prudential Regulation for Investments.' The guidelines say that core lending business should be undertaken by the bank while restricting lenders and their NBFC units from duplicating similar revenue streams. Products which are offered by Axis Bank such as gold loans, loans against property and two-wheeler loans are also offered by its subsidiary finance company. "As per its growth plans, Axis Finance will need a couple of thousand crores of capital over the next few years," Chaudhry said. "We are in no position to infuse further capital because that is the commitment we have made to RBI. We have no option but to go to the market and try to raise the capital. We are running a process right now to do that." Chaudhry added that Axis Finance will be classified as an upper layer NBFC soon and that the bank is evaluating an appropriate timeline for listing or a stake sale. The RBI has directed that those finance companies, with asset books exceeding ₹50,000 crore, be classified as upper layer NBFCs and they will have to be listed within a stipulated time frame. Live Events Axis Finance, too, may face a hurdle if the RBI does not issue final guidelines or clarify its stand of the matter. "All the investors know that this is something which will get finalised over a period of time and it could have some long-term implications," Chaudhry said. "When we are talking to the potential investors, we have been quite clear that we will do what is best for the entity concerned and we do not want to destroy value in any form or shape." Chaudhry added that while investors want Axis Bank to stay on as the majority investor, the bank is hoping to find a right investor. "It (RBI draft circular) does have an impact because at the end of the day any amount of uncertainty does mean that the investors will apply some kind of discount," he said. At the end of FY25, Axis Finance reported a profit after tax of ₹676 crore which was up 11% on year. Asset quality was stable with net NPA at 0.37%. Its total loan book stood at ₹39,079 crore, with wholesale at 50% of the book and retail loans at 47%. HDB Finance, a subsidiary of HDFC Bank, too, had to go public with an equity issuance mainly because it is classified as an upper layer NBFC. However, the pricing of the initial public offering-at ₹700-₹740 a share-is at more than a 40% discount to the price the stock was traded in the unlisted space.
Time of India
12-05-2025
- Business
- Time of India
Rate transmission uneven despite liquidity comfort
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel Mumbai: Banks appear to have largely looked through improving system liquidity and policy rate cuts while reducing the cost of borrowing for those taking loans tied to the lenders' internal benchmarks. Rates have reduced by only 5-15 bps for existing borrowers on loans tied to marginal cost of funds-based lending rate, even as liqudity turned into a surplus, and the central bank cumulatively cut policy rates by half a percentage point since February."I think the market rates will remain dynamic for some time before they settle," Amitabh Chaudhry, MD, Axis Bank , had said during the earnings call. "It was something similar when the rate started going up. You will see something similar when the rates are going down. So, it is pretty much a part of the normal playout of this activity over the next couple of quarters." In response to the cumulative 250 basis point rate increase during the last tightening cycle, between May 2022 and September 2024, the one-year median MCLR rose 170 basis weighted average lending rate on fresh and outstanding rupee loans increased 186 basis points and 116 basis points, respectively, during this period. Last week, several major banks made modest adjustments to their lending rates. HDFC Bank , India's most-valued lender, reduced its one-year MCLR by 15 bps, from 9.30% to 9.15%. Liquidity in system has improved since April. Daily average surplus liquidity stood at ₹1.4 lakh crore in April and ₹1.3 lakh crore as of May 8. March saw an average daily deficit of ₹1.23 lakh WALR on outstanding rupee loans declined by 10 bps as of March. In case of fresh loans, it has increased reflecting the significant proportion of MCLR-linked loans in it, given the longer reset period, it may undergo adjustments with some lag, experts say."Uneven pace of rate transmission is due to mix of credit portfolios across fixed and floating rate structures, and varied spreads by banks," said Aastha Gudwani, India chief economist at Barclays.
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Business Standard
27-04-2025
- Business
- Business Standard
Axis Bank plans to raise Rs 20,000 cr through stake sale, debt issuance
Axis Bank Ltd plans to raise Rs 20,000 crore ($2.3 billion) through a share sale as part of a bigger capital raise that includes debt. The Mumbai-based bank plans to raise Rs 35,000 crore ($4.1 billion) through local rupee bonds or foreign currency bonds, Additional Tier-1 bonds, infrastructure bonds and other debt, the bank said in an exchange filing Thursday. The equity funds will raised through sale of local shares or depository receipts, either by way of institutional placement or preferential allotment, it said. The fund raise comes at a time when a gauge of Indian lenders' shares is near its record high, driven by investors' bullishness due to the sector's relative insulation from tariff-related turmoil. Last week, IDFC First Bank Ltd. approved a plan to raise 75 billion rupees ($877 million) from Warburg Pincus LLC and Abu Dhabi Investment Authority. The operating environment is improving, which would help drive growth and profits this financial year, Amitabh Chaudhry, the bank's chief executive said during a media call on Thursday. 'Corporate, secured retail and small-medium-enterprise loans are holding up well. We will stay focused on deposit quality, cost and growth,' he said. Axis Bank's deposit base rose 10% on year to Rs 11.73 trillion and advances grew 8% to Rs 10.41 trillioN, underpinned by its corporate and small-medium-enterprise loan books. Gross non-performing assets stood at 1.28%, compared with an estimate of 1.51%.
India.com
26-04-2025
- Business
- India.com
Bad news for employees of this company as 100 senior staff asked to leave due to…, not Narayana Murthy's Infosys, Ratan Tata's TCS, the company is…
Representational Image Axis Bank layoffs: Axis Bank, one of India's leading private banks, has reportedly sacked over 100 senior employees, with CEO Amitabh Chaudhry later saying that the layoffs were part of the lender's annual appraisal process. As per reports, more than 100 senior staff were asked to leave during the bank's Q4 FY25 earnings call due to poor performance. 'As is the case in any organisation, we conduct a detailed appraisal cycle at the end of each financial year. Many employees are rewarded and promoted, while some may fall short in terms of performance, leading to difficult conversations,' Axis Bank CEO Amitabh Chaudhry said while commenting on reports about the private lender asking more than 100 senior workers to leave. Chaudhry noted that the banking industry is facing multi-faceted challenges due to which the performance of some employees in various sectors has dipped over the last fiscal. ''On one side bank is investing heavily in certain areas, in some areas, obviously given the performance given how some people might have fared you might see some individuals existing but that happens every year,' he said, adding that the layoffs are a 'nothing unusual', and part of the bank's annual appraisal cycle. Meanwhile, according to Axis Bank's Q4 results, its net profit stagnated at Rs 7,117 crore, while the operating profit for the January-March 2025 quarter, saw a marginal 2 percent YoY increase to Rs 10,752 crore. The private bank's Net Interest Margin (NIM) for Q4 FY25 stood at 3.97 percent, improving 4 bps QoQ, while its operating revenue witnessed a 4 percent YoY growth to Rs 20,590, up from Rs 19,855 crore in same period last year.
